Is there a chance that Coolpad, which has “nothing, no reputation”, can get on board with 360?

Is there a chance that Coolpad, which has “nothing, no reputation”, can get on board with 360?

At the end of the year, the mobile phone industry is still in turmoil. The rumored news of 360's investment in mobile phones has finally become a reality. Qihoo 360 announced yesterday that it has formed a strategic alliance with Coolpad and invested $409.05 million in Coolpad to establish a joint venture. Qihoo 360 will hold 45% of the shares of the joint venture, which will sell smartphones under the "Dashen" brand. There are many industry analyses on this, but we believe that for a relatively heavyweight cooperation, we need to know the reasons and the reasons in order to objectively judge the prospects of this cooperation.

Although 360 seems to be the active party in this investment, from Coolpad's current performance of "three nothings" in the smartphone market, we believe that Coolpad may need 360 more, or more precisely, financial support to continue to develop. Why do you think so?

First of all, it needs to be stated that when we call Coolpad "three no's" it is not a derogatory term that Coolpad's products are unqualified, but rather its shortcomings compared with its competitors in the industry, and this deficiency ultimately led Coolpad to accept 360's investment cooperation.

As we all know, the "China Cool Alliance" was once the representative of the development of China's smartphone market. However, with the development of many brands, it has become difficult for Coolpad and ZTE to play the role of representatives of China's smartphone industry, except for Huawei and Lenovo. For example, judging from the market share alone, Coolpad has never entered the top five in the global market. Although it is still hovering around the top five in the Chinese market, it always relies on its price advantage when it ranks high.

For example, in the first half of this year, the significant growth in Coolpad's 4G mobile phone shipments was mainly due to the low-price, low-profit customized phones produced in cooperation with operators. However, this model of relying solely on low prices in cooperation with operators was quickly diluted in the second half of this year as operators adjusted their subsidy policies and competitors followed up. This is also the main reason why Coolpad launched its independent brand "Dashen" at the beginning of this year. Speaking of independent brands, Coolpad has actually been doing it sporadically before, but in terms of results, it is obviously not as good as Huawei in the "China Cool Alliance". Although Lenovo and ZTE have not achieved satisfactory results in this regard, it at least proves that Coolpad has not performed well among the four major manufacturers in terms of marketing methods.

Some people may say that, except for Coolpad, the other three manufacturers are also like this? They are all equally matched, at least they don't have much advantage over Coolpad? There is nothing wrong with this statement, but can we conclude that Coolpad has no special advantage over its competitors in the smartphone industry, and lead to a tug-of-war between Coolpad and its main competitors in the smartphone industry?

It is precisely because of the lack of unique advantages in the competition of the smartphone industry that Coolpad’s future is not good despite the tug-of-war. This leads to our view on Coolpad’s second “nothing”. The industry knows that for Huawei, Lenovo and ZTE in the “China Cool Alliance”, the smartphone business is only one of their businesses, and it is a new growth point for the expansion of the original business. So far, they cannot be called the main force in terms of revenue and profit. However, judging from the main business of these three companies, their performance is among the best in their respective industries.

For example, Lenovo is the leader in the global PC market; Huawei is also ranked first in the telecommunications equipment market. This undoubtedly provides a favorable guarantee for the three manufacturers to continue to fight or seesaw in the smartphone market. It should be noted that in addition to expanding in smartphones, the above three companies are also seeking opportunities in the enterprise market, and some have already achieved some success. For example, Lenovo's acquisition of IBM's X86 server business has made it the leader in China's enterprise service market and the third in the world; Huawei's enterprise business is also progressing rapidly; ZTE is also constantly exerting its strength in the government market. It is not difficult to see that Coolpad has almost no advantage in business diversification, especially in the subsequent support of business diversification for mobile phone business. This is also the main reason why we mentioned earlier that it is not a good strategy for Coolpad, which has no advantage in the smartphone industry, to fight a seesaw battle with its competitors.

The industry knows that since the beginning of this year, the competition in China's smartphone market has been fierce, and as smartphones become more popular in China, the growth space of China's smartphone market is getting smaller and smaller. For this reason, overseas markets are considered to be the only way for Chinese mobile phone companies, especially mainstream companies, to achieve sustainable development. However, whether in terms of brand influence, overseas market accumulation, expansion experience and measures, Coolpad has no advantages compared with Lenovo, Huawei and ZTE. This is also the third "nothing" of Coolpad that we want to talk about. For example, Lenovo gained valuable experience through the acquisition of IBM PC several years ago and established a certain brand influence in overseas markets. As for Huawei and ZTE, they also built their own brand image through the telecommunications equipment market very early and established extensive cooperative relations with operators.

In addition to the above-mentioned accumulation of overseas markets, Lenovo has also strengthened its competitiveness in overseas markets in the future through the acquisition of Motorola Mobility, while Huawei and ZTE have continuously expanded their brand influence in overseas markets through various means such as sports marketing. In comparison, Coolpad is inherently deficient in overseas markets, and its subsequent expansion is far less active than its competitors. Therefore, what substantial help this new growth point can bring to Coolpad is indeed full of challenges and unknowns.

Based on the above analysis, we believe that Coolpad's "three nothings" in the smartphone industry, i.e., no advantages, no follow-up support, and no overseas market accumulation and measures, means that it can only fight a seesaw battle with its competitors in the domestic market as much as possible, that is, to exchange time for and find new opportunities, and all of this naturally requires investment support. So the question is, can 360's investment help Coolpad change the above "three nothings"? Although money is absolutely impossible, money is not omnipotent, and is this $400 million really enough to fundamentally change any of Coolpad's "three nothings"?

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

<<:  360 has little chance of success in returning to its old business of mobile phones

>>:  Why did Zhou Hongyi return to the mobile phone market?

Recommend

This generation of young people has been targeted by gout...

A younger body I can't stand your tossing and...

What exactly is this high-end “brand tone”?

At the last meeting, the boss brought up the conc...

Introduction to Qinggua Media’s intelligent advertising delivery system!

Introduction to Qinggua Media Intelligent Adverti...

Xiaohongshu promotion notes targeting skills and flow limiting precautions!

Imagine what kind of effect it would have when yo...

In some places in Hainan, this tree is more famous than the coconut tree →

Walking in Hainan, you can see coconut trees ever...

Google's latest app Cardboard Camera turns your phone into a VR camera

Although Samsung Gear VR has been very popular re...

Fuwei SEO-Large Website SEO Implementation Plan

Fuwei SEO-Large Website SEO Implementation Plan T...

Mango TV is unique and independent, and it is more than just a single broadcaster

The fierce competition in the video website indust...

Volkswagen may be numb to the lawsuit again

According to foreign media reports, the state of ...

Don't brag! Because bragging is really hard...

The poem says: Why is the sky so dark? Because co...